In discussions today on Twitter about changes to single parents incomes, I was a bit grumpy about the lack of policy history going on. Politics at the moment feels somehow void of memory. All announcements existing out of time and previous reports; just erupting fresh to be gobbled up and squabbled over. The goldfish swarm then moving on to the next gaffe, presser, doorstop, press release.

As I’ve talked about before, this is so completely unhelpful in teasing out complex policy and actually making a difference in actual peoples’ lives. It’s also deeply frustrating, as policy wheels just get reinvented over, and over, and over again.

The rhetoric about welfare ‘reform’ is not new. Enquiries were held in the 1920s through to the 1950s about the aged pension, and what form it should take. In contrast to many other countries, Australia’s pension model is not based on a type of social insurance, instead it is a means-tested entitlement. This paper has a great examination of the development of the unique Australian system.

The invalid pension was constantly changed – for example, in 1974, the requirement that a person had to be of ‘good character’ was removed.

Aboriginal people were only completely included under the welfare system in 1966.

The policy assumptions that underpinned Australia’s welfare policy have included some significant gender based bias when it comes to what is called work. Women were expected to be supported by a husband, working full-time, therefore structuring out any discussion of care work as having intrinsic value.

Unemployment benefits were introduced within this background of ‘full employment’, which really meant employment for men, with women expected to work at home. The work of caring for children, or anyone else, was erased as having monetary value from the very beginning.

Some estimates of the value of the care economy are as high as $30 billion per year for non-child related care, while women are still doing most of the unpaid care work, whether doing other work or not. A 2003 report, based on the 1997 Time Use survey, showed clearly the cost to women of unpaid care work.

The last major welfare ‘reform’ was done through the 1999 McClure Report. This report, and the then Howard Government’s response to it, entrenched the idea of so-called ‘mutual obligation’ and introduced Newstart. These changes also increased the barriers to accessing the single parent and disability pensions, while increasing benefits to those receiving the aged pension.

These changes were the final nail in the coffin of any discussion of a universal right of all citizens to be able to have a fair and decent life. Previous conversations about guaranteed incomes, or government as a buffer to an unequal market economy, or even structural disadvantage seemed to vanish. Now, any individual not able to find a job, was deemed solely responsible for that failure.

“We know the Government is determined to force changes on single parents and disability support pensioners….I believe the community will not accept any measures which place inappropriate obligations or lead to reduced payments for either of these two groups,”

the ALP has not hesitated to follow in Howard’s footsteps when it comes to welfare payments.

Despite being all about social inclusion, the current Federal Government has shown no willingness to engage in a broader conversation about the value of unpaid care work, despite recognising the gender inequalities for women working in the care sector.

So what has all this got to do with the current furore over forcing the remaining single parents onto Newstart when their youngest child turns eight? Firstly, the idea that parents are not working is bogus. Raising children is work, but it seems as though this is not the kind of work either major political party is willing to recognise. Secondly, single parents, who are mostly women, face huge challenges engaging with a labour market that is still structured around a single person, with no dependants. For parents with a child with a disability, these challenges are even greater. This is not a new idea.

The ACOSS submission to the ‘Allowance Adequacy’ Senate Enquiry outlines in stark detail the reality of the current welfare system. The Newstart allowance, with its multiple obligations and frequent breaches, leads to the highest rate of poverty and social exclusion. With more and more older people now on Newstart, the idea that this is some kind of luxurious holiday for young bludgers is simply not supported by any data.

Perhaps some better questions could be about how to ensure that employment is far more flexible and adaptive to workers outside the faux-traditional breadwinner model. Or whether a conversation about guaranteed adequate incomes/universal minimum wages could lead to better policy outcomes, rather than silly, political stunts about living on the dole for a week. And how do we value care work, equally with other economic data, and report on social wealth indicators as frequently as gold prices?

12 Responses to Getting welfare policy out of the goldfish bowl

I don’t disagree with the overall position in the blog, although I struggle to understand the benefit to the people who effectively subsidise child raising both in terms of tax payments and making up for workplace flexibility, that is people without children. I’ve seen arguments that child raising provides a benefit to everyone, but I’ve never actually seen any empirical evidence of this. The childless pay a working lifetime of tax from which child care rebates and support are paid, but never get any return for it. Further, to provide workplace flexibility, it’s often the childless who take up the slack to cover for colleagues with flexible arrangements for children, but again there’s never any pay-back. I know of a public sector workplace with a predominantly female workforce where the flexibility of having kids means that they’re constantly understaffed (not on paper, but in practice due to half the workforce being on mat leave) and the people without kids are the drones who keep everything running.

From a tax perspective, I support means testing of all government benefits as it shifts the equation to being a pure welfare measure rather than a public subsidy for private reproductive choices. However, there still are non-means tested child benefits. Why should these exist at all? And where’s the pay-back to people who never have children?

The other issue is how do you address moral hazard in the welfare system? This applies to reproduction most of all because, unlike illness and most unemployment, it’s a purely voluntary condition. A family with 10 kids will get as much support for the 10th child as for the 1st and is more likely to be in a position where they’re net beneficiaries of the public purse. Why can’t we have a system whereby you get 100% benefit for the first child, 80% for the second but after that it’s all out of your own pocket? Or if you have more than a certain number of children you pay a higher rate of tax for a certain number of years once they’re no longer dependent?

My final issue is that many of the arguments around the societal obligations of child rearing are a bit like agrarian socialism, in that the costs of parenting are sought to be put on the public purse as much as possible but the benefits are firmly kept private.

Thanks for the detailed response, and I’m sure you won’t be surprised that I disagree. As someone without kids, there are lots of things that my tax money goes towards subsidising that I don’t agree with, such as private health and education; defence spending; corporate subsidies and negative gearing. But as someone who believes is a collective approach, providing decent incomes for people raising kids is something I quite happily support.
The idea that every tax dollar has to have an individualised payback just doesn’t stack up in a democratic society. You could make the same argument that people with kids shouldn’t have to support you when you get older as you didn’t have kids to provide for you.
On means testing, there are many pros and cons about whether it is an economically efficient or fair way to manage income distribution. I’ll do another post about this as it’s a bit complicated.
Same with the moral hazard argument. There just isn’t evidence to support it as a reason to not provide a basic level of income to all members of a community.
And I disagree about the private nature of making sure families don’t end up in poverty. It’s in my own self-interest, let alone economic interest, to ensure that all kids have access to decent housing, education and healthcare.

Funnily enough those things that you list in not supporting I don’t support either. What I was trying to ellicit was a consistent theoretical underpinning for the policy, which I’ve not come across to date. Most of the arguments that have been put to me have been amorphous and unempirical, and came across as a fairly self-serving attempt to justify a snout in the public trough – this applies particularly to the coalition’s proposed policy to provide public mat funding for women on up to $150K a year, which would see tax payers on lower salaries subsidising the reproductive choices of people much wealthier than them (that really gripes my sense of equity).

Interesting that you raise the argument from some that “people with kids shouldn’t have to support you when you get older as you didn’t have kids to provide for you” as I’ve heard that before and think it’s a red herring:
(a) people with kids can’t guarantee that those kids will support them and may become as dependent on the public purse as a childless person, and no extra burden is placed on those kids who then ‘abandon’ their parents, so it’s a fallacious argument – there is no guaranteed pay-back from having kids other than the ‘psychic rewards’ as a parent. If there is an assumption that kids will support the parents, is that where the pay-off is – that parents get less aged care support from the public purse because their aged care has already been publicly funded through child support? Otherwise, it’s double-dipping isn’t it?;
(b) the childless don’t get any unique tax payer funded benefits so it’s also a fallacy to argue that people with kids are supporting them, certainly not disproportionately to anyone else in society. A childless person is not entitled to more aged care support than a parent.

I understand the individual pay-back argument on taxation and don’t have an issue with it in general, but I’m not sure if even a societal pay-back argument has been proven in relation to child-rearing. One slight nuance is that most of that public infrastructure/spending relates to things which could or will affect you: everyone will need medical care at some stage, everyone will get old and need care, everyone benefits from roads etc. As a (I assume a more pink than green) Green, I would assume you’d not agree with reducing the role of the state to provide the bare common needs, but that’s more of the position I come from. Back to reproduction, surely from a purely economic analysis there’s a cut-off point even for a societal benefit of procreating (ignoring the environmental issues) as if everyone had 10 children, the cost of supporting those kids and the loss of productivity and tax revenue would bankrupt the state pretty quickly. Accordingly shouldn’t the state draw a line at a point where child-bearing switches from societal benefit to societal cost?

I hear constantly that parenting is a joyful, fulfilling, rewarding role that nobody would ever swap for anything else. Yet the tone in favour of public funding for childcare takes on a tone that it’s an unwanted burden, a tedious chore so bad that people need to be paid to do it. It can’t be both.

I’m very interested to read your views against means-testing, as I can help but see non-means tested benefits as anything but the poor subsidising the well-off.

I tend to find that a lot of the ‘slack’ covering colleagues with flexible child care needs is done by other colleagues who also have children. Tit for tat, mutual support. The ‘race out the door’ regardless mentality isn’t specifically related to parental status.
Besides, child raising is a small slice of our working lives.

One point- a parent with a disabled child would have access to Carer’s Payment.
There is a lot of nonsense being sprouted about the $35 per day, which ignores that it is the single rate, and people with dependent a get more, and the other supports available. I’m not trying to take away from the problems that sole parents have – I was on Supporting Parent Benefit then Carers for 18 years – but the current debate is not very helpful.

You’re right that it’s a tricky area of study and that there’s limited and now, old, data available. The link to the Security for Women study has some good recommendations about getting some more robust information about care responsibilities. The new Census data hasn’t been done yet, but I’m ok with using academics who work with the data, and understand its limitations, making conclusions, as in other scientific areas.

Childless people are likely to require medical assistance, services and possibly aged care – those who provide it (whether at public or private cost) are the children of others, as are those working to develop new technologies or conduct research into curing diseases – our children (i.e. the children of our community) are not pieces of property to be cashed in when they have appreciated sufficiently in value – they are an investment in the continuation and development of a society